Success Story In Spanish

MEDIA

Hispanic Tv Companies Are Making A Fortune And Getting Increasing Competition

January 25, 1998|By ANDREW POLLACK The New York Times and Sun-Sentinel staff reports were used to supplement this report.

Even before the recent run-up in Univision stock, Forbes ranked him among the richest Americans, with net worth of $1.5 billion.

Univision began in '61

Univision, started in 1961 as Spanish International Network, was financed then by Emilio Azcarraga, a Mexican media mogul whose Grupo Televisa now practically monopolizes entertainment in Mexico _ particularly the wildly popular telenovelas, serial dramas featuring high emotion and low-cut dresses. With the government charging that he was in violation of the ban on foreign ownership of television stations, Azcarraga sold Univision in 1986.

In his first effort to purchase Univision, Perenchio, who had once owned Spanish station WNJU in New York, lost to Hallmark Cards. But when Hallmark did poorly, it decided to unload the network in 1992. Perenchio and Azcarraga teamed with Venevision, the leading network in Venezuela, to buy Univision for about $500 million. Televisa and Venevision each now owns 20 percent on a fully diluted basis.

Hallmark started some of the shows that are popular today, such as the talk show hosted by Cristina Saralegui, the Hispanic Oprah, and Sabado Gigante, or Giant Saturday, a variety show. Hallmark also arranged for Nielsen Media Research to measure Spanish television audiences, giving Univision the data needed to attract advertisers.

Univision's exclusive U.S. rights to programs from Televisa and Venevision have locked Telemundo out of popular programming such as the telenovelas. And low-cost Latin American production has boosted profit margins.

In the third quarter of 1997, net income more than doubled from a year earlier to $25.1 million. Univision went public in September 1996, at $23 per share, and the stock rose above $78 before a recent two-for-one split.

Recently, tensions have arisen between Univision and its two partners, who apparently want higher fees for their programming. Univision has said it was threatening to sue Venevision for not providing enough programming. And Televisa is planning a U.S. satellite broadcasting service that could compete with Univision. Azcarraga died last April and the company is now being restructured by his son.

Some analysts think Sony, which will be in charge of Telemundo's programming, could have an opening by making programs more relevant to U.S. Latinos or higher in technical quality than Univision's.

Andy Kaplan, executive vice president of Sony Pictures' television group, plans to ``tap into the Hispanic talent pool'' in the United States and to have strong locally oriented shows. Sony can also broadcast its films and might make Spanish versions of its popular TV shows, such as Jeopardy and Mad About You.